american shared hospital services · proton therapy has low market penetration advanced radiation...
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American Shared Hospital Services Making the Best Healthcare Technology Accessible
December 2019 NYSE American: AMS
Safe Harbor Statement
This presentation may be deemed to contain certain forward-looking statements with respect to the financial condition, results of operations and future plans of American Shared Hospital Services (including statements regarding the expected continued growth in volume of the MEVION S250 system, the expansion of the Company's proton therapy business, and the timing of treatments by new Gamma Knife systems) which involve risks and uncertainties including, but not limited to, the risks of variability of financial results between quarters, the risks of the Gamma Knife and radiation therapy businesses, the risks of changes to CMS reimbursement rates or reimbursement methodology, and the risks of the timing, financing, and operations of the Company’s proton therapy business. Further information on potential factors that could affect the financial condition, results of operations and future plans of American Shared Hospital Services is included in the filings of the Company with the Securities and Exchange Commission, including the Company's Annual Reports on Form 10-K, Quarterly Reports on Form 10-Q and the definitive Proxy Statement for the Annual Meeting of Shareholders.
NYSE American: AMS 2
Overview
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American Shared Hospital Services has an over 30-year track record of leasing state-of-the-art medical equipment to hospitals and medical centers in the United States and abroad. We are the worldwide leader in Gamma Knife unit ownership through our 81% owned subsidiary, GK Financing, LLC (GKF). Our Gamma Knife financing model has been expanded to incorporate the financing of other technology solutions including Intensity Modulated Radiation Therapy (IMRT) and Proton Beam Radiation Therapy (PBRT).
Ticker: NYSE American AMS Price (12/6/2019) $2.55 52 Week Range $2.19 - $3.30 Market Cap $14.8M Average Daily Trading (30 day) ~15,000 FD Common Shares Outstanding 5.9M Float 3.7M Tangible Book Value per share (9/30/2019) $5.40 Cash and Equivalents per share (9/30/2019) $0.17
MARKET DATA
NYSE American: AMS
Investment Highlights
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+ Pioneer in single room Proton Beam Radiation Therapy (PBRT) services
+ World leading supplier of Gamma Knife services
+ Long-standing alliances with premier cancer centers
+ Large market opportunities
Proton Therapy has low market penetration
Advanced radiation therapy devices
+ Proven business model
Operating profitability for 20 of last 21 years
+ Respected management team with deep experience
Respected Management Team With Deep Experience
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MANAGEMENT TEAM Years of Healthcare
Experience
Ernest A. Bates, M.D. Founder, Chairman and CEO
30+
Craig K. Tagawa COO and CFO
30+
Ernest R. Bates V.P., Sales and Business Development
15+
Alexis Wallace Controller
10+
NYSE American: AMS
Highly Regarded Customers*
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+ UC San Francisco Medical Center
+ Methodist Hospital: San Antonio, TX
+ Johns Hopkins Medical Center: Baltimore, MD
+ Yale-New Haven Hospital: New Haven, CT
+ Kettering Medical Center: Kettering, OH
+ Lovelace Medical Center: Albuquerque, NM
+ Northern Westchester Hospital: Mt. Kisco, NY
+ Tufts Medical Center: Boston, MA
+ University of Arkansas for Medical Sciences:
Little Rock, AR
+ Merit Health Central: Jackson, MS
+ OSF St. Francis Medical Center: Peoria, IL
+ PeaceHealth: Eugene: OR
+ USC University Hospital: Los Angeles, CA
* Representative list
NYSE American: AMS
Proven Business Model
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+ Structured as an alternative leasing company
+ Offer Innovative financing features not available from traditional
finance companies
+ Long Term Agreements
Typically 10 years
+ Revenue Sharing or Fee Per Use
No minimum volume guarantees
NYSE American: AMS
Partner Responsibilities
ASHS’
RESPONSIBILITIES
• Acquire equipment
• Equipment-related operating expenses
• Jointly fund marketing
HOSPITAL
RESPONSIBILITIES
• Site costs
• Non-equipment-related operating expenses
• Jointly fund marketing
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Growing Contribution from Proton Therapy
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14.5 16.1 16.1
14.8
13.6
10.3
4.1 5.0
4.7
0.9 0.4
0.5 0.6 1.1
0.8
$0
$5
$10
$15
$20
$25
2014 2015 2016 2017 2018 9/30/2019YTD
GKF PBRT IGRT
Revenue Summary 2013 – 2019
$ / Millions
NYSE American: AMS
Proton Beam Radiation Therapy
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+ Commercial & Profitable: Single room proton beam radiation therapy centers
+ Significantly reduced average cost per treatment room to $30 - $40M
+ ASHS provider is Mevion Medical Systems
+ Partner: The Marjorie and
Leonard Williams Center for Proton Therapy at UF Health Cancer Center - Orlando Health
+ NOT a NEW Technology
+ Clinically Advantageous
+ Protons deposited dose at tumor,
more effective than x-rays passing
through a tumor
+ Minimizes damage to surrounding
tissue
+ Increasing awareness of therapeutic
benefits across indications
Indications Treated: Prostate Breast
Head and Neck Lymphomas
Lung Central Nervous System
Liver Pediatric
GI
NYSE American: AMS
Photon vs. Proton
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Pediatric Medulloblastoma
Photon Beam Delivery
Proton Beam Delivery
PBRT Delivers Improved Dose
Distribution
% Dose Recommended
NYSE American: AMS
Large U.S. Market Opportunity for Additional PBRT Centers
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+ Currently only 30 PBRT centers* in operation
Capacity of 90 rooms
+ Only 4 PBRT centers under construction or in development*
+ Only 7% - 14% of required capacity is currently available for
treatment
ASHS projected capacity required to meet demand
635 – 1,270 rooms**
+ Each additional treatment room offers potential for substantial
incremental Revenue and EBITDA
* Source: The National Association for Proton Therapy, 2019
** Assumes 15% - 30% of 1.1 million patients eligible for radiation therapy annually receive PBRT, see slide 15
NYSE American: AMS
Low Market Penetration of PBRT
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PBRT CAPTURE RATE 15% 2 30% 3
Number of radiation therapy patients annually in the U.S.1 1,057,470 1,057,470
Percent of radiation therapy patients eligible for PBRT
15% 30%
Number of potential PBRT patients in the U.S.
158,600 317,241
Potential PBRT room market* 635 1,270
Current PBRT rooms in operation4 90
*Assumed 250 patients treated annually per PBRT room (1) The American Cancer Society indicates that 1,762,450 people in the United States will be diagnosed with cancer in 2019. Approximately 60% of these people will
receive radiation treatment. (2) “Number of Patients Potentially Eligible for Proton Therapy,” Acta Oncologica 2005; 44; 836-849; Bengt Glimelius, Anders Ask, Et. Al. (3) “Evaluation of Potential Proton Therapy Utilization in a Market Based Environment,” Tomas Dvorak, M.D. and David E. Wazer, M.D. (4) The National Association for Proton Therapy, 2019
NYSE American: AMS
Exploring Expansion Opportunities
+ Developing single and
two room proton beam
radiation therapy
centers with major
hospitals
+ MR Guided Linac
+ Community Hospitals
+ International + Latin America initially
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Gamma Knife Radiosurgery Equipment
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+ World’s leading supplier U.S. market share ~13%
+ Gold standard equipment for cranial radiosurgery Non-invasive alternative to surgery for malignant and benign brain tumors, vascular malformations and trigeminal neuralgia (facial pain)
+ Typically improves patient quality of life both during and after treatment Usually performed as an outpatient procedure Virtually pain-free Typically no anesthesia Minimal side effects Patients typically return to pre-surgery activities within several days
+ Typical project cost - $3 - 4 million
NYSE American: AMS
Current Business Status
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+ Identifying healthcare technology investment opportunities
with long term growth potential
+ Negotiations continuing for 2 additional PBRT installations
+ Gamma Knife
Completed first Icon upgrade
Anticipate additional Icon upgrades in 2020
+ Identifying additional international
opportunities
NYSE American: AMS
Thank You!
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For Further Information Contact:
Craig Tagawa COO and CFO
[email protected] (415) 788-5300
www.ashs.com
NYSE American: AMS
American Shared Hospital Services Making the Best Healthcare Technology Accessible